Jet Airways has confirmed that it will acquire rival carrier Air Sahara in a ground-breaking deal worth around $500 million. The deal represents the first consolidation in India’s fast-changing air transport market.
Jet, India’s largest privately owned airline, confirmed to the Bombay Stock Exchange that directors “considered and approved, subject to receipt of regulatory approvals as may be required, the acquisition by the company of 100% of the full paid-up equity share capital of Sahara Airlines Ltd”.
Jet says the cash deal will be worth around $500 million.
Delhi-based Air Sahara, which is owned by the Sahara Group conglomerate, has been on the market for some time as it needs cash to expand, although Mumbai-based Jet denied in October any interest in buying it. Recently launched Kingfisher Airlines was considered a front-runner in the bidding but it says it has withdrawn its offer as the asking price was too high.
Jet and Air Sahara have domestic market shares estimated at around 43% and 12%, respectively. Both have extensive domestic networks and limited international operations. Many industry observers have been predicting that there will be consolidation in the Indian market, where several new airlines have launched services over the past two years. Jet and Air Sahara both launched operations in the early 1990s.
NICHOLAS IONIDES / SINGAPORE